US-China Tech Tensions Won't Be Resolved Even If Biden Wins Presidential Seat

By Mary Anne R. Sep 28 2020, 04:09 AM EDT

The dispute over technology between the U.S. and China will not go away even if Democratic presidential nominee Joe Biden wins the elections in November, according to an analyst.

Tensions between the two economic giants have become steady this year as U.S. targets Chinese tech giants. It started from phone maker Huawei to video-sharing app TikTok.

The Trump administration claims that Huawei and other Chinese technology companies could gather American user data and hand them over to Beijing. These claims are both applied to Huawei and TikTok, which they denied.

"Imagine a scenario where Biden becomes president, I don't think on the technology issues... (they) are going to go away in any meaningful manner," Taimur Baig, chief economist and managing director at DBS Group Research, said in a report.

Baig added that it might be less volatile and it may be more rules-based, but the tension will remain.

President Donald Trump banned any U.S. transactions with Chinese tech firms Tencent and Byte Dance. Tencent owns the famous Chinese messaging app WeChat, while Bytedance is the parent company of TikTok.

Last week, the U.S. reportedly implemented restrictions on China's biggest chipmaker, SMIC.

The restrictions were brought by risks that equipment supplied to the firm could be used for military purposes, according to the U.S. Commerce Department's letter last Friday.

Baig maintained that he does not think the U.S. elections outcome would make things infinitely better for China.

"It probably makes it a little less volatile," Baig said.

Relations between Washington and Beijing took a turn to worse in 2018. This was when Trump administration implemented billions of dollars tariffs on Chinese goods.

Beijing then took counter with the same punitive measures, which resulted in a protracted trade war.

Meanwhile, Biden criticized the trade war with China, saying that tariffs have hurt American businesses and consumers. However, he still called for the U.S. to "get tough on China."

Trade experts said that Biden could be placed under pressure to continue the stance on China, as well as keeping those tariffs in place.

Baig said that the trade tensions forced China to increase investment domestically, which boosted homegrown technology. He added that by pushing China into a corner, it forces China to be self-sufficient.

"So I don't think that hurts China in the near term," Baig noted.

However, Baig added that this could be very problematic in the near future for some tech companies and SMIC if they have absolutely no chips. He also questioned the nation's sustainability to continue on imposing harsher measures.

Meanwhile, a U.S. judge temporarily blocks Trump's order to ban TikTok on app store downloads.

U.S. district Judge Carl Nichols has given a preliminary injunction sought by TikTok's owner, ByteDance, to allow the app to remain available at U.S. app stores.

However, Nichols declined to block additional commerce department restrictions that are scheduled to take effect on Nov. 12.

Nichol's detailed written statement is set to be released as early as Monday.